Baker Homes responds to the publication of the Government’s Housing White Paper published on 7th February 2017.

“The housing market in this country is broken, and the cause is very simple: for too long, we haven’t built enough homes”

This is possibly the most important Government White Paper since the Conservatives came to power with the Liberal Democrats in 2010.  Everyone is aware of Britain’s housing crisis – low supply, affordability, poor quality (in places), tenant rights, a lack of social housing and an over-obsession with home ownership.

What is clear is that the Government has taken a comprehensive view of the issues, in many ways admitting its own shortcomings in dealing with this accelerating crisis. It creates an honest view of the state of the market and shows how all the sector stakeholders need to pull together to reverse this generational crisis.

Headlines

As White Papers go – this works on a number of levels. The Government recognises several issues:– skills shortages, planning capacity and industry inefficiencies.  It appears that the Government has listened to some of the fundamental issues within the UK housing sector, if we were simply talking about the pace of building; but more on that later. Some of the headlines:

• The focus, unsurprisingly, is on increasing the supply of housing in terms of pace and quantity
• A larger role for local authorities in house building and facilitating house building through better administration
• A friendlier approach to RSL’s
• Increased protection for private renters and improving the private rental sector
• Increased protection for the Green Belt
• Further mechanisms for regional devolution
• Encouraging RSL’s to build affordable homes
• The HCA to become Homes England
• Modern methods of construction are to be supported to deal with the lack of innovation in the sector
• Bringing more institutional investors into the housing sector
• A more balanced tenure model recognising affordability and demographic issues
• A reiteration of sustainable development under the NPPF
• Proposal to update climate change factors in policy to reflect future climate

If you look really hard sustainability, the environment and climate change are in there alongside energy efficiency and flooding. It’s a shame that the Paris Climate Agreement isn’t mentioned once in the document – this is arguably one of the biggest policy challenges facing the UK Government in the next five years alongside Brexit, except that it doesn’t get the coverage.

The Baker Homes’ view 

Make no mistake – the focus of the White Paper is about increasing supply. And some of the proposals will probably go some way to do that. But our housing crisis is much more complex than the paper outlines. Quantity and pace are two words used continuously by this Government, but there needs to be more emphasis on quality. And by this we mean standards.

Regulation is often blamed for business inefficiency and lack of delivery, but as the White Paper itself points out, the slow rate of building has been down to process, capacity, skills, and structural conditions in the market. A number of national house builders have enjoyed an unfair advantage by land-banking and delivering at a pace that will protect their desired margins. It could be argued it is not in their interest to drive up quality or quantity given the predominant delivery models; so this shake-up, especially with repeated reference to modern methods of construction, is long overdue.

It’s important to remember that a range of environmental standards have been eroded by in recent years and that new build completions have not seen a dramatic explosion since the Code was abolished. Better environmental regulation in the automotive (VW excluded), white goods and electronics sectors has neither led to the demise of those sectors nor a fall in sales. Remember the recession of 2008 was borne out of irresponsibility and a lack of regulatory oversight, not because we wanted more water efficient toilets.

The White Paper does identify flooding, climate change, energy efficiency and other sustainability issues, which is welcome. What the Housing Bill needs to do is make the link to the outside world. It must acknowledge the impact of any legislation that may trickle down from the Paris Agreement, but also that after the cost of rent or a mortgage, utility spend is the next highest cost occupiers will face. There is no use in expanding shared ownership products when you can’t afford to heat your home. Our energy market will change and building homes today which have a gas boiler, without acknowledging changing wholesale prices, new heating technology, scarcity and climate obligations, means that our traditional approach to house building will bind us to the same mistakes.

As a nice complement to the Bonfield Review, the Housing White Paper does well to identify steps to address skills shortages in the sector. The Government, and those providing homes however, must be mindful of two issues here: 1) improving skills, especially in an era of more hi-tech homes, will not necessarily increase the speed of building, but will ensure better quality of low carbon technology installation and management; 2) it’s not just construction or ‘on-site’ skills which need a focus. Often clients, such as RSLs, do not have the skills internally to specify or even manage complex housing projects with district heating or alternative systems for example. This needs to be addressed as often mistakes are made at the design stage locking in defects and management issues for the next 80 years.

Any White Paper that addresses and recognises the issues in an era of crisis should be commended. Balancing the challenges will prove difficult. Baker Homes’ view is that the paper does do its bit to recognise climate change and sustainability and whilst we’re not saying ‘more needs to be done’ or ‘missed opportunity’ any iteration of new housing policy must link far better to the existing suite of policies and structures in place to tackle climate change in the UK. The work of the Committee on Climate Change, especially around resilience, must be better integrated. Any regulatory impact from Paris needs to be embedded now to improve the poor homes that still dog our asset landscape today. The need for proper environmental standards that meet our obligations needs to be addressed – simply meeting building regulations is not enough. And quality must be given the same profile as quantity. In our rush to meet demand we must all be careful to not simply create the next housing crisis but actually create a housing supply with sustainable homes.

For further information and press queries please contact Joana Malato, marketing and communications manager on 020 8973 0429.

Bevan Jones

Bevan is the managing director of Baker Homes. Bevan’s areas of expertise are: Climate change adaptation | Climate change and business planning | Sustainable organisations | Carbon management | Sustainability strategy | Consultancy